Each and every morning, I check the local MLS to see what new listings there are in the areas that I specialize in. It is a way for me to make sure that my buyers get first shot at any great listings as well as a way to help me keep a pulse on the market. More and more, however, it has become a source of entertainment as agent after agent list homes for well above (often 20-50% above) what it is even possible for the home to sell for. There are a number of reasons why I believe this happens.

First, there are a lot of inexperienced and lazy agents out there. The inexperienced ones often have little idea of the true market value of a home or of the differences from one street to another. The second scenario is very common in Sacramento, a town made up of literally hundreds of micro-markets. For example, in East Sacramento there may be a six figure difference between a home located on the 1300 block of 42nd Street and the 1600 block. Sadly, there are many that do not understand the difference. The lazy agents, on the other hand, either do not do the work necessary to properly value the home or are not willing to take the energy that it often takes to properly explain the monetary value of a home to a home-seller who often sees their home as having far more value than strictly a monetary one.

Second, it is a common strategy of agents to raise expectations of sellers in order to get a listing. I cannot tell you how many times I have lost a listing to a less scrupulous agent because they chose a ridiculous price out of the air. A home that I recently gave the sellers an approximate (it is always approximate) sales price of $699,000 got listed with an agent for $899,000. I was told by the sellers that I had undervalued their home, so they were going with the agent that saw what the house was "really" worth. I am sure that you can guess the rest of the story. I explained the importance of properly pricing a house in a falling market so that you don't end up "chasing the market," a practice of continually lowering your price just behind the market, a practice that is very costly for the home-sellers. 18 months later, as the market in that neighborhood has fallen more than 20%, the house is still on the market, but it is now priced in the mid-$500,000 price range. The cost of the seller's mistake and the promises of a less than scrupulous agent: nearly $200,000. The home has still not sold to this day.

This does not mean that it is not possible for a house to sell for 10-20% more than other comparable homes. This is usually done, however, by having a proper sales and marketing strategy, a strategy that is often dependent upon the initial decision when it comes to sales price. By pricing a home improperly in a falling market, an agent is exacerbating his/her client's losses.

Okay, I have gone on a bit of a tirade this morning that seems to contradict the rather jolly title of this post. Perhaps, after thinking about it a little more (and getting my blood boiling just a touch), I really think that it is not funny at all when I see such poorly priced homes get listed into the MLS; it is just sad. Of course, this does leave a lot of opportunity for those agents and home-sellers that know how to properly price, market, and sell a home in this market.